Sponsorship is highly nuanced and, at its core, driven by emotion. It is also constantly evolving in response to market dynamics and new regulations. To this end, it is not possible to create a comprehensive set of heuristics to explain the landscape. These Heuristics intend to get you to the start line in client conversations, not the finish.
Sponsorship strategy, sales and delivery differs by Market, Event Type, Sport and many other variables. Please make sure that all Heuristics are relevant to your use case before applying..
If you have specific questions or require support, please discuss with the Heuristics captains.
If you require visuals from these Heuristics, please contact the ‘Knowing Fans Best’ team.
Sponsorship is the second largest revenue stream within sport after Media Rights – beating event day and other revenue streams.
The sports sponsorship market is worth north of $46bn per year and has a strong projected growth rate in future years.
Annualised Sponsorship Revenue
generated in the Sports Market (2023)
The world’s leading brands invest in sports sponsorship to grow audiences and drive revenue.
For Premium Rightsholders, Sponsorship can generate 40%+ of their annualised revenue.
Through time, the ‘category’ of brands investing in sport ebs and flows – building into 2025, nonalcoholic drinks, electric vehicles and luxury brands are all investing in sports sponsorship.
In 2025 – F1 is forecasted to generate $2.9bn in Sports Sponsorship, putting it at the top of sports rightsholders.
Sponsorship is a major revenue driver for sports rightsholders
Rightsholders rely on sponsorship revenues for a significant chunk of their income (typically 20%-40%)
It’s important to understand the commercial structure of every business before making assumptions on their revenue and the ways in which they make money.
Of sports rightsholder revenue comes from Sponsorship
(approx.)
The share of revenue that sports rightsholders earn from sponsorship is dependent of the type of rightsholder, sport, and region. From international federations, sponsorship revenue tends to make up a larger proportion of revenue, whereas Domestic Leagues revenue is often dominated by Media Rights and sponsorship contributes less.
For example, women’s sports properties typically generate a higher proportion of revenue through sponsorship, as broadcast audiences, media rights and ticketing sales lag behind in growth.
Also, major B2B platforms (e.g sailing) also skew heavily towards sponsorship revenues as they can deliver valuable business-generating opportunities .
(Vs ~40% from Media Rights, ~20% from Event Day)
Source:TwoCirclesSportsSprintto$260Bn
The worlds biggest and best brands leverage sponsorship, typically with premium global rights holders, to grow their business
Brands engage with Sports Sponsorship in order to remain relevant in a cost effective and efficient manner.
These brands recognise that sport provides the ability to increase brand visibility, reach a wide and engaged audience and foster positive brand perception, in a way that other mediums don’t allow cut through.
Sports ability to do this is based around the emotion it generates and the passion that fan bases hold for their teams – with brands benefitting from the proximity to this emotion.
Nike, Adidas, Coca-Cola, Pepsico and Puma are amongst the Top 10 brands investing in sports sponsorship.
The Sponsorship Landscape
North America is the leading market for Sports Sponsorship revenues, driven by it’s largest rightsholders.
40% of Sports Revenue comes from Rights Holders based in North America
With some of the largest sports rightsholders in the world, the USA makes up a huge proportion of the world’s sponsorship market – NFL, NBA and MLB leading the charge.
For this reason, Rightsholders based outside of the USA see this market as a huge revenue growth opportunity, although the market can be notoriously hard to break in to.
F1’s success following ‘Drive to Survive’ has seen huge revenue growth in the US – including in it’s sponsorship revenues, demonstrating the potential revenue gain in ‘winning’ in America.
Source:TwoCirclesSportsSprintto$260Bn
Why do Brands invest in Sponsorship?
Sports fixtures are consistently the most watched TV broadcasts.
Delivering mass global brand recognition
Promoting a brand’s product and messaging
Convincing customers to purchase
Direct lead generation
of the most watched broadcasts in the USA in 2023 were sports events
Sport can connect with billions through live broadcasts, media coverage, and digital platforms.
Alongside the out-and-out reach generated by mass watched sporting events, the passion and emotion that connects the fans with the sport are what brands look to tap into when investing into rights.
Logo Placement on pitches, shirt sponsors, in-ground LEDs and digital advertising inbroadcast are some ways in which brands look to grow their brand and drive awareness.
Awareness at scale is a hugely valuable objective for many of the worlds leading brands.
Nurture/retain existing customers
Why do Brands invest in Sponsorship?
Partnering with a Rights Holder builds trust & credibility with a brand.
Delivering mass global brand recognition
Promoting a brand’s product and messaging
Convincing customers to purchase
Direct lead generation
Nurture/retain existing customers
Brand sponsorships in Sport are the 2nd most trusted form of advertising; 2nd only to personal recommendations
Brands can directly measure attributable traffic and behaviour of customers landing on their platforms from rights holder activity.
Trust and loyalty - when a brand sponsors a rights holder, fans experience a shared sense of loyalty which can spark consideration of a fan to interact with the brand and it’s associated products.
Engagement - brands will be able to instantly measure ROI on their partnership by tracking behaviour and traffic across their platforms.
Role models - Fans see those that represent their teams/athletes as people to aspire to and support and will buy products like merch to illustrate this.
Why do Brands invest in Sponsorship?
Partnering with a Rights Holder positively impacts the brand perception of fans of that rights holder.
Delivering mass global brand recognition
Promoting a brand’s product and messaging
Convincing customers to purchase
Direct lead generation
Nurture/retain existing customers
uplift in conversion on Digital advertising where brands have leveraged IP from Sports rights holders
Similar to the rights holder, emotional connections can be formed with customers where loyalty is rewarded and both parties benefit.
Creating unique experiences -Rights holders allow brands to go beyond traditional marketing and create meaningful experiences (gameday activations, community programs) providing memories and strengthening bonds.
Emotional connection -Fans are deeply passionate about their teams/athletes. When a brand is associated with a team or athlete, that emotional energy can transfer to the brand, making it more memorable and likable.
Shared values - Rights holders often represent values that fans align to such as commitment and excellence, if brands can match this then this drives authenticity and trust which can be engrained long-term
Understanding Sponsorship Sales
The number of brands approached is dependent on the rightsholder, specific sales process, and outreach cadence. However, targets at each stage of the funnel aid in helping to secure a partnership at the end of the process
Approx % of Brands Approached Reaching this Funnel Phase
Heads of Terms (HOT):
A preliminary discussion where parties involved in a potential agreement outline the key terms and conditions before entering into a formal contract, serving as a roadmap for future negotiations.
~6 out of 10 brands approached respond to outreach.
~ Maximised by staying up to date with industry news to understand growth categories and how this impacts those investing in partnerships. Regulation changes can also change this landscape.
~2 out of 10 brands approached agree to a kick-off meeting
~1 out of 10 brands continue past meeting 1
Within interim meetings, evoking emotion and excitement about a potential partnership by gifting and experiences can help in getting to a HOT meeting.
~1 out of 20 brands reach Heads of Terms meetings.
It is crucial once at Heads of Terms to create an appealing package for the brand – optimised for their business objectives.
~1 out of 100 brands reach the offer stage.
~ ~ ~ ~ Research prior to a first meet is critical for improving chances of a follow up, understanding a brand and their objectives helps craft the narrative and show alignment.
(0.2 0.6%)
Building on competitive tension and utilising hard deadlines to drive urgency and increase offers. (E.g. Kit printing deadlines, additional exposure opportunities etc.)
Understanding Sponsorship Sales
As authorities exert stricter control on sponsorship deals across the industry, rights holders will need to be adaptable in their approach to fill the void of newly regulated categories.
A proportion of current sponsorship deals across the sport industry are made up of betting and/or cryptocurrency companies
Regulatory bodies such as the Financial Conduct Authority (FCA) are introducing new rules preventing rights holders freely agreeing sponsorship deals with gambling companies, cryptoassets etc.
The Premier League have released a code of conduct for gambling deals, meaning that betting companies will no longer be able to sponsor the front of shirts from the end of the 2025-26 campaign
Rights holders will now have to rethink their strategy, avoiding categories that have proven fruitful in recent years
Identify BD opportunities across rights holders of high-risk sponsorship portfolios that may need replacing Stay close to regulations across markets as there can be differences across regions. For example, regulations are getting more lenient in the US and there are strong rumours that the gambling ban will be
Build a prospect list that mitigates the risk of regulatory input from legal or governing bodies but is also market-specific overturned in Italy. This could result in a shift in brand’s focus from one market to another.
Fewer, larger partnerships which ensure the value of the IP stays high. Providing cheap access points will cheapen the value of the IP.
3 x LED advertising
10 x Player of the Match
5 x Email Banner
While brands may not want to pay for all assets, packaging them together avoids diluting the value of the IP
Any removal of rights should not significantly impact the cost of the overall package
The most valuable rights holders do not itemize their assets for brands to pick and choose from
Ensuring partners remain resilient, even amid business complications or revenue gaps, is crucial for sustaining long-term value
Manage rights holder inventory together; avoiding splitting out assets, especially externally-facing, as this will lead to complications in future brand conversations
Plan strategically - Reject short-term revenue gains for long-term value maintenance. Many rightsholders are too reactive rather than proactive in packaging rights.
LED advertising Player of the Match Email Banner
Understanding Sponsorship Sales
Having a sales pipeline of 3+ bidders in advanced conversations will help secure your target valuation through competitive tension.
Competitive tension drives the real value; our process focuses on creating scarcity of packages to drive rights fees up
Use a category-led approach to drive pipeline, so that competing brands can offer against one another to drive partnership value up.
The longer a rights holder's rights are in market, the more opportunity to have multiple bidders.
The more entry points to invest in sponsorship for your rights, the less ability you have to drive competitive tension and value.
Use a category-led approach to drive your pipeline, so that competing brands can offer against one another to drive partnership value up.
Drive scarcity by reducing the number of entry points for brands.
#CompetitiveBidders
Category Led Approach = A category refers to the type of brand investing in your rights (Banking, Travel, Finance, …) and a Category Led Approach refers to structuring your rights in a way that brands bid to be your ‘category’ partner.
Understanding Sponsorship Sales
Rapid Growth of Women’s Sport:
Women’s sports are experiencing strong global growth, with annual revenues projected to rise by 25% YoY to $2.35BN, fueled by increased investment, participation, and fan interest.
Rising Sponsorship Momentum:
Sponsorship deals in women’s sports grew by 22% YoY, with over 5.5k deals in 23/24, as brands continue to recognize the opportunity to reach a new, and highly engaged audience.
High ROI for Brands:
Women’s sports deliver strong returns – every £1 spent yields over £7 in consumer value (vs. £4.30 in men’s sport), and 86% of brands report that their women’s sport sponsorships met or exceeded expectations.
Understand Women’s Sport Sponsorship Trends:
Top 5 women’s Professional Sports Leagues by growth in Sponsorship Deals: WTA/ITF, LPGA, NWSL, Australian Football League Women, and the WSL
The WTA and PLGA are the first two women’s sports leagues to each surpass 1k sponsorship deals from 22-23.
The most active brands supporting women’s sports via sponsorship are: Gatorade, Hologic, Coca-cola, Nike, and Rolex with more than 50 deals
…And Women’s Sports Audiences:
Fans of women's sports typically demonstrate stronger sponsor awareness, higher purchase consideration, and better sponsor sentiment compared to men’s sports fans.
Fans of women’s sport are….
• 45% more willing to consider or purchase from sponsor brands compared to fans of men’s sport
• 54% more aware of sponsors compared to fans of men’s sports
Understanding Sponsorship Sales
The likelihood of selling an asset increases considerably with time in market. However, time can kill deals and deadlines can push deals to get done.
Why is too far under 18 months sub-optimal?
Limited time to sell doesn’t allow for brand conversations to mature.
Likely restricts the volume of offers to negotiate a stronger deal with.
Why is too far over 18 months sub-optimal?
Makes the rights on sale look non-desirable.
As you approach an event, limits the time available to exploit the deal.
Value of Deal
Months in market considerably increases the likelihood of selling an asset
With some rights – the more time in market, the better, as you are given additional opportunities to sell the assets.
However, if you are too far from an event, unknown factors such as location or structure of competitions begin to have a negative impact on brand conversations.
This timeline could be extended for certain assets, such as front of shirt – given printing deadlines are often >12 months before the kit is available for retail.
Time in Market
Understanding Sponsorship Sales
With more ability than ever to demonstrate ROI – more digitally led brands targeting conversion are getting involved in Sports Sponsorship than ever before.
There has been an increase in digitally-led consumer product brands investing in sports sponsorship, which is set to continue to increase. of new deals above £0.5m per annum, made up from digitally-led consumer product brands
A "digitally led consumer brand" is a business that prioritizes digital channels and strategies for building its brand identity, engaging with customers, and driving sales, rather than relying on traditional marketing methods.
In 2024, 60% of new deals above £0.5m per annum, are made up from digitallyled consumer product brands – up from 39% in 2023 and 24% in 2022
Rights Holders should continue to build digital assets that offer fan additive digital integration to meet growing market demand
Continue to build digital audiences across Rights Holders Websites and Apps – in order to grow the value of digital assets.
Develop Marketing and Attribution processes that allow you to activate for brands and measure performance.
Understanding Sponsorship Sales Process
Badged digital assets are more effective at driving impressions and engagements, but branded content is most effective at growing brand understanding.
Badged Assets: existing content, media, or an event that features a brand's logo. The brand does not create or control the primary content but instead adds its "badge" to an external property
Branded Content: content that is created or co-created by a brand to engage its audience directly.
Badged Assets are 1.7x more effective at driving digital media value than Branded Content
Picking the correct digital activation:
Align your digital activations to your partners objectives – if looking to drive media value, Badged Assets are a powerful tool. If looking to build brand awareness – then integrating authentically into branded content might be the better approach.
Branded Content is 1.5x more effective at driving brand message awareness than Badged Assets
Understanding Sponsorship Activation
We’re seeing a shift from “traditional” Partnerships to an “outcomes-led” Partnerships.
Brands are increasingly using sports sponsorship as an opportunity to activate responsible product ranges. This is driven by:
Changing consumer attitudes: increased societal focus on sustainability, wellness and ethical consumption
Regulatory & political pressure: stricter advertising rules around certain categories, including alcohol, tobacco and fossil fuels.
Sustainability commitments: societal and rights owner commitments to reducing carbon footprints
Non AlcoholicBeveragesisoneofthetop5growing categoriesin2025.
- Guinness0.0%(SixNations)
- Asahi0.0%(ManCity)
- Heineken0.0%(F1)
This has the resulting impact of:
In recent years, Partnerships have less of an emphasis on the traditional model of ‘large fee for typical assets (e.g. LED)’ and more of an emphasis on mutually beneficial (to brand and rights holder) ‘impactful’ Partnerships. E.g. focus on ‘purpose’ through grassroots, supporting the community, ESG initiatives, etc
Growing of purpose-driven partnerships: increased prevalence of partnerships with clear objectives to drive positive social change
This new arena in California aims to revolutionise the fan experience with features such as a halo board, AI-driven tech and immersive AR and VR experiences.
Los Angeles Rams
Brands that incorporate Technology (AR, VR, etc.) often see a higher return on investment in their partnerships.
Arsenal
The LA Rams partnered with AR company 8i to create VR experiences with the stadium’s app.
Arsenal partnered with Rhapsody Media to deliver AR / VR experiences.
